Thursday, July 16, 2015

Ethiopian Airlines Capital Playing The Slots

That is to say the Wide Body production "slots". Ethiopian has demonstrated a key characteristic. It needs the best airplanes now, or whenever it really needs an airplane immediately other than now. 

"Tewolde GebreMariam, CEO of Ethiopian Airlines, said the company is in the process of evaluating Boeing 777-XAirbus 350-1000 and Bombardier Q400 aircraft,"

My suspicions are price and production slots will determine the sale over what would be a better aircraft for any airline, having similar considerations. They are leveraging its capital position for reaching its 2025 goal.

"The airline is looking to increase its 2025 goal of $10 billion annual revenues with a rapid expansion of its routes." 

It recently tied up the 787 early builds that were sitting at the head of Boeing's stationary 787 line. It bought 6, 787-8's that were completed three years ago and were heavily discounted by Boeing in its fire sale. It was time for Ethiopian to buy and it was now, they got them!

"In June, Boeing announced that Ethiopian Airlines ordered six 787-8 Dreamliners at a cost of $1.3 billion in an effort to modernize and expand its fleet."

Ethiopian has identified what it needs and what it wants. Wide Bodies, sooner rather than later. It moved up its A-350-9 order by a year. 

“… and is also discussing the possibility of an earlier delivery from Airbus of 14 A350-900 aircraft in 2016-2017, previously scheduled for 2016-2018.” 

The only conclusion is Ethiopian has embarked on a Juggernaut’s journey for meeting its goals, and will not look back once it arrives as the dominant airline of its region.